Ch. 15 - Related Party Transcations

Question 1

Two ways to measure a RPT

Answer 1

1. carrying amount

2. exchange amount

Question 2

Carrying Amount - Treatment for difference between carrying amounts of items exchanged

Answer 2

charged to equity

• gains to contributed surplus
• losses to original contributed surplus, until 0, then to RE

Question 3

criteria to be in the normal course of operations

Answer 3

it is usually, frequently or regularly undertaken to generate revenue

Question 4

what constitutes a substantive change in ownership

Answer 4

a change in ownership of at least 20% of an asset

Question 5

Ways to show there is independent evidence of exchange amount

Answer 5

1. independent appraisal
2. comparable recent quoted market prices
3. comparable independent bids

Question 6

Is it an exchange of similar items

Answer 6

yes?

Question 7

Does the transaction have commercial substance

2 Criteria

Answer 7

1. Is there a change in the risk, timing and amount of cash flows
2. the entity specific value of the asset received is different from the asset given up

Question 8

Required Disclosures

Answer 8

1. relationship
2. transaction details
3. amount
4. measurement basis
5. contractual obligations
6. contingencies

Question 9

IFRS - General measurement for RPTs

Answer 9

generally measured at the exchange amount

Question 10

IFRS - additional disclosure

Answer 10

key mgmt compensation

Question 11

memorize chart image

Answer 11

yes?

Question 12

Related Party Transactions - ASPE #

Answer 12

3840

Question 13

Decision Tree - Is the transaction in the normal course of operations

1. Yes
2. No

Answer 13

1. Is it a NMT

2. Is the ownership change substantive

Question 14

Decision Tree - Is the ownership change substantive

1. Yes
2. No

Answer 14

1. Is it supported by independent evidence

2. measure at carrying amount

Question 15

Decision Tree - Is it supported by independent evidence

1. Yes
2. No

Answer 15

1. Is it a NMT

2. measure at carrying amount

Question 16

Decision Tree - Is it a NMT

1. Yes
2. No

Answer 16

1. Does it have commercial substance

2. measure at exchange amount

Question 17

Decision Tree - does it have commercial substance

1. Yes
2. No

Answer 17

1. measure at exchange amount

2. measure at carrying amount